NEW BEARISH Plays

Guess' Inc. - GES - close: 27.20 change: -0.48

Stop Loss: 27.85
Target(s): 23.00
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 21, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 871 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
GES is in the services sector. The company markets and licenses apparel and accessories. They currently have almost 500 retail store locations in the U.S. and almost 350 in the rest of the world. Unfortunately retail is a tough place to be right now. The holiday shopping season was disappointing and the first quarter of 2014 has been assaulted by one of the coldest winters in memory. The latest round of monthly same-store sales numbers were another big disappointment for the industry.

GES has been struggling for a while with a trend of falling revenue growth and shrinking margins. They face a challenging environment for both the U.S. and Asia. Their most recent earnings report on March 19th was a disappointment with management guiding lower for fiscal 2015's revenues and profits.

The stock is technically bearish with a pattern of lower highs that is pushing GES against major support near $27.00. Today's intraday low was $26.81. The February intraday low was $26.76. I am suggesting a trigger to open bearish positions at $26.65. If triggered our target is $23.00 but we will plan on exiting prior to GES' earnings in late May.

Trigger @ 26.65

Suggested Position: short GES stock @ (trigger)

- (or for more adventurous traders, try this option) -

Buy the Jun $27 PUT (GES1421R27) current ask $1.50

Annotated chart:

Weekly chart: